Etsy Gets Physical
Following suit of some of the biggest players in e-commerce such as Amazon, Rent the Runway, and Shoes.com; Etsy is getting physical. That is to say, the online retailer that provides a platform for the worldwide community of crafters to sell their handmade creations, has just opened their first physical shop. Etsy has partnered with Macy’s to open a store in their flagship Herald Square location in New York. This is a part of their strategy to partner with major retailers to develop a greater reach for the site’s sellers. “For designers to showcase their products to a locally and globally diverse customer base in the exciting selling environment of Herald Square, is an incredible opportunity for both wholesalers and customers,” said Marc Mastronardi, executive vice president and general merchandise manager of Accessories/Center Core for Macy’s. This presents Etsy an opportunity to target different segments that Macy’s might already be bringing in. They may differ especially on psychographics, capturing those who do not typically shop online. There is also an element of horizontal differentiation as there are some Etsy products that have been specifically designed for Macy’s. Introducing handmade products may appeal to customers who value the craft over mass production. I believe Etsy will see good results from this development as the company has garnered a strong customer base in their 10 years of operation, and will likely grow that number by having physical store fronts for customers – new and old – to visit.
While by nature, Etsy has a highly engaging retail value proposition by allowing anyone to become a vendor and facilitating customer engagement, they are now able to engage face-to-face. Although there is only one shop for now, Etsy could leverage face time to strengthen customer relationships and reinforce that sense of authenticity they so proudly value. I also think there is an opportunity here for the customers to actually meet the designers who made the products they are buying, creating an even stronger relationship than the anonymity of a typical retail experience. Not only this, but Etsy is already one step ahead as they have the advantage of being able to use the customer data from their online platform to analyze, and better serve their market in-store.
This is the first time since the launch of the website that Etsy has used omni-channels to physically present products to customers. The tangible element gives customers a “try before you buy” option, allowing them to evaluate the quality of the product for themselves. This way, they may use the shop as a showroom to acquaint themselves with each designer, and use the online channel to continue buying from them with confidence in what they will receive. Etsy will provide a virtual endless selection to consumers as well. Macy’s has a dedicated team of curators that select the products to be sold in-store by eight vendors, which will be updated every six to eight weeks, with a new theme each time. If I lived in New York, I know I’d be visiting with every update to experience the new themes they've come up with.